Have you had a client tell you they didn’t receive the benefits you estimated they were entitled to when you prepared their income tax and benefit return?  In some cases, they might be getting the benefits but just don’t realize it because they haven’t checked their bank account.

But for other clients, they owe money to various creditors.  And in certain instances, the Canada Revenue Agency (CRA) acts somewhat like a collection agency, withholding the client’s refund and possibly some of their benefits, and redirecting these to the client’s creditor.  The client may not realize they owe this money or, if they do know about the debt, they may not realize the CRA has the legal authority to do this.

In this article, I identify several different kinds of debts that a client might have where the CRA may get involved.  These include income tax arrears, overpayments of federal and provincial or territorial benefits, ineligible COVID-related support, monies owed to other federal departments and provincial or territorial governments, and monies owed because of a court order that has not been respected. 

In some of these cases, it is clear as to how the CRA proceeds.  But in others, it is not because the CRA does not provide clear information on its rules for what it calls “recovery actions”, claiming that these will often depend on the client’s circumstances.

This debt will usually be referred to in the client’s CRA account which you can access using Represent A Client.  This article provides you with information to help you explain to the client any discrepancy between your estimates of the client’s refund and benefits, and what the client gets from the CRA.